I have pretty much given up hope on keeping the Kings barring some miracle, but now I am worried the Maloofs will stiff us as well, sticking us with the Arena nobody wants and bonds that need to be paid. These latest developments demonstrate that the city has the same very real fears, and nowhere yet have I seen anyone say that the Maloofs have to, in an iron clad fashion, pay that money back. Instead I am reading about what we get if they default. If the contract somehow says anything other than "the Kings can't leave unless they pay off the money" then we are doubly screwed and I am worried because it sure seems like if those words were indeed in the contract then the City wouldn't be futzing around with going after secondary players like the city of Anaheim. This is a scary development in my mind financially.
Related to all this, I was curious about the $25 mil penalty thing if they default. According to this site:
http://www.forbes.com/lists/2010/32/basketball-valuations-11_Sacramento-Kings_327146.html Forbes decided in January that the team is worth around $293 mil. So $25 mil is around 8.5 percent of the team. An interesting coincidence is that the Maloofs bought 53% of the team back in 1998 (according to this page:
http://www.reviewjournal.com/lvrj_home/2000/Oct-24-Tue-2000/business/14666446.html and the amount they bought it for, according to that Forbes link above, was $156 mil. So if 53% was $156 mil then the team's total worth was $294 million when they bought them, almost exactly the same as now. I don't know what the team's value was back when the original loan was made with Thomas, but I am sure that $25 mil was a much higher percentage of the team back then. Sure wish the framers of that original contract had made the collateral a percentage rather than a fixed amount. Huge difference.
The real question concerns that 8.5 percent. Will that come out of the then Thomas/ now Maloof portion of the value, or is it spread between all the owners? But even if it is spread between all the owners evenly, 53% of 8.5 is 4.5% so subtracting the Maloofs share of that $25 million value out would still drop the Maloofs down below the 50% majority ownership.
Interesting.
Unless the Maloofs now own more than 53%. Anyone know if they somehow gained a larger share over the years?